What Drives Brands’ Pricing Clout and Receptivity? An Empirical Examination for the Chinese Packaged Goods Industry
(A2021-94692)

AUTHORS

bernadette van ewijk, university of amsterdam business school; Els Gijsbrechts, Tilburg University; Jan-Benedict E.M. Steenkamp, University of North Carolina at Chapel Hill

ABSTRACT

As competition among CPG brands intensifies, brand managers increasingly focus on price. To what extent do price changes by brands affect (their own and competitive) sales (= clout)? To what extent are these brands vulnerable to price changes of competitors (= receptivity)? Which brand and category factors drive these outcomes? And: how can brands improve their position in this competitive landscape? The authors address these questions using a unique data set that combines five years of Chinese scanner panel, advertising, and survey data, across 377 brands in 50 categories. Social demonstrance reduces the intensity of price competition and makes brands less vulnerable to rival actions. Receptivity but especially clout tends to be lower for categories in the growth stage or with many players. Broadening distribution increases clout but also makes the brand more vulnerable to competitive price attacks, whereas increases in line length reduce receptivity to rival actions.

REFERENCES

We thank AiMark, Kantar Worldpanel, and the GfK Verein for providing the data. We gratefully acknowledge the comments of Yubo Chen, Angela Liu, Harald van Heerde, and Katrijn Gielens.